Cost of living in Greater China cities rise across the board, while locations in Europe plummet

Hong Kong has shot up 26 places in the list of most expensive cities to become the 32nd most costly location for international assignees, according to a new Cost of Living survey from ECA International, the world's leader in the development and provision of solutions for the management and assignment of employees around the world.

The survey reveals that Hong Kong is now more expensive than Manhattan (36th) and Paris (42nd), although it remains cheaper than other regional hubs such as Beijing (22nd), Shanghai (26th), which have also jumped up the ranking, and Singapore (31st).

"Over the past 12 months, we have seen the cost of our representative basket of goods and services in Hong Kong increase by 6.7% - slightly more than the regional average," said Lee Quane, regional director, Asia, ECA International.

"At the same time, the Hong Kong dollar’s peg to a stronger US dollar is making the SAR more expensive for many companies sending employees there on assignment,” he said.

Within Asia, Hong Kong remains the 9th most expensive location – the same position it held a year ago. Tokyo has also retained its position as the most expensive location in Asia and the world.

Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To help multinational companies calculate assignment salaries, ECA carries out two Cost of Living Surveys per year, comparing a basket of consumer goods and services commonly purchased by assignees in more than 400 locations worldwide.

“Certain living costs such as accommodation rental, utilities charges, car purchases and school fees are not included in this survey. Although such items can have a significant effect on overall cost of living, they are usually compensated for separately in expatriate packages so this data is researched and published separately,” explained Quane.

China – increasingly expensive for international assignments

Despite Hong Kong’s rise in the global ranking, it remains cheaper than Beijing (22nd globally) and Shanghai (26th), which have climbed 13 and 15 places respectively over the year. Other mainland China locations, including Guangzhou (56th) and Shenzhen (59th), have also seen climbs. While these do still remain cheaper than the SAR, they are now more expensive than Jakarta (123rd) and Bangkok (163rd) for international assignees.

“This year we have seen the cost of items in ECA’s shopping basket for China increase 5%. While this is down from the 9% increases we saw a year ago it is still high compared with price inflation witnessed in other parts of the world, particularly Europe and North America where the economy has not grown at the extreme pace witnessed in China in the last few years,” said Quane.

“Additionally, the Renminbi has strengthened against many currencies. Together these two factors are making Chinese locations increasingly expensive. This could be stripping them of the competitive edge they once had over other locations in Asia as companies looking to set up in the region might think twice, now, about posting staff to China,” he added.

Asia region highlights

Over the past three years, Asian locations have climbed up the global ranking. Nine Asian locations now feature in the top 50 most costly locations for international assignees worldwide. In 2009, only four were in the top 50, none of which were Hong Kong, Singapore, Beijing, Shanghai or Seoul.

Tokyo is still the most expensive location in Asia and globally – despite Japan being the only location in Asia to experience price falls this year. On average, prices of items in ECA's Cost of Living basket for Asia have increased by 6.5% – significantly less than last year's average increase of 8.2%.

While Hong Kong and mainland Chinese locations have seen the biggest leaps up the Asian ranking this year, some of the region’s biggest falls have been witnessed in Indonesia. The weakening of the Rupiah against major currencies has contributed to Jakarta falling 32 places, to become the world's 123rd most expensive location for expatriates.

Karachi in Pakistan remains the least expensive Asian location in the ranking.

Australasia – Australian locations remain among the most expensive in the world

All Australian locations surveyed now rank in the world's top 30 most expensive locations. Sydney is the most costly, in 16th position globally, followed by Canberra (18th), Adelaide (21st), Melbourne (24th), Perth (25th), Darwin (27th) and Brisbane (28th).

"Just three years ago, none of the Australian locations in our survey featured in the top 60, and all were cheaper than Hong Kong. Since then, the Australian dollar has gone from strength to strength and remains high today. This makes Australia an expensive place to live: the cost of goods and services in Sydney, for example, is now 12% higher than the cost of the equivalent goods and services in Hong Kong," said Quane.

Auckland (41st globally) is the most expensive of the New Zealand locations surveyed. Christchurch has also risen 12 places over the year, and now sits in 55th position.

Europe – locations across the region fall in the global ranking

Many locations across the region fell in the global ranking as the euro and other European currencies weakened against the US dollar while prices increased at a slower rate in Europe on average than other regions over the year.

The Norwegian locations of Oslo and Stavanger, ranked 3rd and 8th in the world respectively, are the region’s most expensive locations. The free-floating Norwegian krone has been strong for much of the last two years, reflecting the country's relative economic success. They are followed by the Swiss cities of Zurich (9th), Geneva (10th) and Bern (11th).

The on-going financial crisis in Greece and Spain has seen Athens fall 47 positions in 12 months to 109th spot in the global ranking, while Madrid, dropped 44 places to 105th.

One of the biggest falls down the global ranking has been witnessed in Portugal – another country hit by the sovereign debt crisis. Lisbon fell from 98th to 158th position over the year.

London and locations surveyed in Russia, Turkey and Ukraine have proved more resilient. London gained 11 places and now sits in 58th position globally. Istanbul rose 21 places to 34th while the Turkish capital, Ankara, rose 31 positions to 121st globally – one of the biggest rises in this survey. The lira has strengthened against major currencies in the past twelve months. In addition, prices in ECA’s cost of living basket in Turkey have increased at a faster rate this year than last.

The Moldovan capital of Chisinau remains the least expensive European city surveyed.

Americas – Vancouver most costly North American location, while Brazilian cities fall

The Canadian city of Vancouver is North America’s most expensive location for the second year in a row. The city ranks 35th globally and is followed by Manhattan. The strengthening of the US dollar against major currencies has led to all of the US locations surveyed moving up the ranking in the past 12 months – despite the cost of items in the cost of living basket increasing at a slower rate than many other parts of the world.

In South America, the Venezuelan capital, Caracas, sitting in 7th position globally, is the most expensive city followed by Argentina's Buenos Aires (47th globally). The Brazilian locations of Rio de Janeiro (64th) and Sao Paulo (69th) follow. However, both have fallen more than 40 places in the ranking in the past 12 months – largely a result of the weakening of the Brazilian real against the US dollar and other major currencies.

Africa and Middle East – Angolan city of Luanda most expensive in Africa

Africa’s most expensive location is the Angolan capital, Luanda. Globally the city is back in the top 10 most expensive locations having moved up from last year's 11th position into 4th. It is followed by South Sudan capital of Juba (14th) and the Democratic Republic of Congo's Kinshasa (19th).

The Egyptian capital, Cairo has risen 15 places to 219th while South African locations continue to fall down the ranking. Johannesburg is currently in 222nd spot – down from last year's 204th position.

Notes to Editors

About ECA's Cost of Living Survey

ECA International's cost of living indices are calculated based upon surveys carried out annually in March and September using a basket of day-to-day goods and services. The data used above refers to year-on-year movements between ECA's September 2012 and 2011 surveys.

The data is used by ECA clients to calculate cost of living allowances for assignees. The survey covers:

Certain living costs such as accommodation rental, utilities charges (electricity, gas, water), car purchases and school fees are not included in the survey. Such items can make a significant difference to expenses but are usually compensated for separately in expatriate packages.

This comparison of cost of living was calculated on a base composed of various developed countries and is used to reflect an international lifestyle. Other indices available from ECA reflect specific city-to-city comparisons, and different levels of shopping efficiency.

Top 50 most expensive cities worldwide for international assignees

Country

Location

Global ranking 2012

Global ranking 2011

Japan

Tokyo

1

1

Japan

Nagoya

2

4

Norway

Oslo

3

2

Angola

Luanda

4

11

Japan

Yokohama

5

6

Japan

Kobe

6

10

Venezuela

Caracas

7

13

Norway

Stavanger

8

8

Switzerland

Zurich

9

5

Switzerland

Geneva

10

3

Switzerland

Bern

11

7

Switzerland

Basel

12

9

Papua New Guinea

Port Moresby

13

28

South Sudan

Juba

14

60

Russia

Moscow

15

16

Australia

Sydney

16

15

Denmark

Copenhagen

17

12

Australia

Canberra

18

17

Democratic Republic of the Congo

Kinshasa

19

30

Sweden

Stockholm

20

19

Australia

Adelaide

21

24

China

Beijing

22

35

Korea Republic

Seoul

23

21

Australia

Melbourne

24

23

Australia

Perth

25

25

China

Shanghai

26

41

Australia

Darwin

27

27

Australia

Brisbane

28

26

Finland

Helsinki

29

14

Gabon

Libreville

30

18

Singapore

Singapore

31

31

Hong Kong

Hong Kong

32

58

Sweden

Gothenburg

33

37

Nigeria

Abuja

34

49

Canada

Vancouver

35

43

United States of America

Manhattan NY

36

46

Canada

Ottawa

37

50

Nigeria

Lagos

38

84

Azerbaijan

Baku

39

71

Canada

Toronto

40

57

New Zealand

Auckland

41

44

France

Paris

42

20

Canada

Montreal

43

63

Russia

St Petersburg

44

52

Israel

Tel Aviv

45

32

New Zealand

Wellington

46

51

Argentina

Buenos Aires

47

96

Senegal

Dakar

48

36

United States of America

New York NY

49

79

United States of America

Honolulu HI

50

74

Most expensive locations in Asia for international assignees

Asia Ranking 2012

Location

Asia Ranking 2011

Global Ranking 2012

1

Tokyo

1

1

2

Nagoya

2

2

3

Yokohama

3

5

4

Kobe

4

6

5

Beijing

7

22

6

Seoul

5

23

7

Shanghai

8

26

8

Singapore

6

31

9

Hong Kong

9

32

10

Busan

10

52

11

Guangzhou

13

56

12

Shenzhen

14

59

13

Taipei

12

63

14

Ulsan

11

66

15

Shenyang

17

81

16

Tianjin

18

85

17

Qingdao

19

88

18

Dalian

20

93

19

Chongqing

21

109

20

Suzhou

23

113

21

Chengdu

24

114

22

Wuhan

25

119

22

Xiamen

25

119

24

Nanjing

27

122

25

Jakarta

15

123

26

Xi'an

28

124

27

Kaohsiung

16

127

28

Bangkok

22

162

29

Kuala Lumpur

30

178

30

Surabaya

29

182

31

Vientiane

33

185

32

Metro-Manila

32

187

33

Chiang Mai

31

189

34

Johor Bahru

35

195

35

New Delhi

34

201

36

Hanoi

41

204

37

Ulaanbaatar

39

205

38

George Town

37

214

39

Mumbai

36

215

40

Ho Chi Minh City

43

216

41

Dhaka

40

219

42

Colombo

38

224

43

Bangalore

42

227

44

Chennai

44

234

45

Pune

46

236

46

Hyderabad

45

237

47

Kolkata

47

240

48

Islamabad

48

241

49

Karachi

49

243

About ECA International

ECA is the world's leader in the development and provision of solutions for the management and assignment of employees around the world. Delivering data, expertise, systems and support in formats which suit its clients, ECA's offer includes a complete 'out-source' package of calculations, advice and services for companies with little international assignment management experience or resource; subscriptions to comprehensive online information and software systems for companies with larger requirements; and custom policy and system development projects for companies who manage thousands of international assignees around the world.